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Minimum hourly wage in state goes up 28 cents

Colorado is one of eight states that will increase its minimum wage today.

The state’s minimum wage shifted at the stroke of midnight from $7.36 an hour to $7.64 an hour. The minimum wage for employees who receive tips also went up 28 cents, to $4.62 an hour.

The shift in the minimum wage is expected to affect 74,000 Colorado employees directly and impact 17,000 employees indirectly, according to an analysis by the National Employment Law Project. The analysis estimated Colorado minimum-wage workers would see an average annual income increase of $465 per person.

An extra 28 cents per hour may not sound like a big pay bump, but Phil Hayes, political director for the Colorado AFL-CIO, said every little bit helps.

“The main benefit is that as expenses rise, people have more money in their pockets,” he said.

Colorado will continue to have the 15th highest minimum wage in the United States this year. No. 1 is Washington, with a minimum wage of $9.04 beginning today.

Colorado is one of 10 states that adjust minimum wage each year based on inflation. The minimum wage increased 3.8 percent this year because the consumer price index for Denver, Boulder and Greeley increased 3.8 percent in the first half of 2011 compared to the first half of 2010.

The minimum wage decreased by four cents in 2010 and increased by 12 cents at the start of 2011.

Hayes said minimum-wage increases often spark a debate about whether employers can handle the added cost. Other costs, including increases in health insurance prices, have a deeper impact on businesses than increasing the minimum wage, according to Alexandra Hall, chief economist for the Colorado Department of Labor and Employment.

Hall said the types of jobs that tend to pay minimum wage are often in rural areas that can pass on the added cost of pay increases to customers without facing much competition from other businesses, or are wait-staff positions at restaurants. Hall said it’s often hard to cut back on wait staff and maintain a successful restaurant, so she doesn’t often see a correlation between layoffs and minimum-wage increases. She said 41,000 out of 55,000 Colorado minimum-wage jobs in 2010 were in tip-earning jobs such as waiting tables.

“(The remaining) 14,000 out of 2.4 million people employed in Colorado is not that many, and chances are most are going to be kids,” Hall said.

Minimum-wage jobs don’t tend to attract too many applicants in Mesa County unless people are nearing the end of their unemployment benefits, Mesa County Workforce Center Administrator Jessica Marler said. Marler said most jobs posted with the site pay at least $8 or more, although some offer the minimum pay for tip-based jobs.

Those nearing the end of their benefits, though, are more willing to go for lower pay, Marler said.

“At first, a lot of people were very picky about what kind of work they’d do or where they’d work, but now that’s not the case,” she said. “It depends on their financial situation.”